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The many free trade agreements that followed the making of the WTO have
left a clear mark: together they have granted multiple rights to global
corporations. There is a parallel history that I have researched since the
1990s: if global corporations gain rights, do citizens also? I now know the
answer: No, citizens actually lost rights, even if eventually they gained a few
rights (notably for same-sex marriage) but these were not linked to the
free-trade treaties. Overall, in most of the western world, citizens lost
rights.

The Transatlantic Trade and
Investment Partnership, which I focus on here, will not help. It will give a
whole set of new rights to corporations and further dilute the rights of
citizens, as workers and as small business-owners. But there is a major new
indirect loss of rights for citizens: the global firms who stand to gain the
most from this treaty want to limit the role of national law and governments by
proposing a sort of private parallel legal system under their control to handle
disputes.[1]

This is the dichotomy we need to keep in mind when we discuss the new
generation of free trade agreements, now nicely renamed “partnerships.” To put
it in a nutshell: they give even more rights to what are now a growing number
of global corporations. In this process they reduce the rights of particular
groups of citizens—manual workers, transport workers, and low-level service
workers directly or indirectly connected to international trade. And they push
particular sectors of governments, notably the executive branch of government,
into becoming their ‘partners’, so to speak.

All of this takes on added
importance if we consider that this transatlantic pact (T-TIP) between the world's two biggest economies,
the EU and the US, would cover almost 50 percent of global GDP. I first discuss
the question of corporate rights. And then the second major issue: creation or
loss of jobs in the countries of the partnership.

Corporations demand more rights via
TTIP

The logic guiding the free
trade agreements that take off in the 1990s is the making of a global
operational space for corporations.[2]
The data make it quite clear that the gains have gone to firms that operate
globally. The possibility of losing or gaining jobs is the key subject for
public discussion in the diverse countries involved. It is critical to many
workers and, though a mixed picture, to governments. But it is a bit irrelevant
to these global firms. It is not their issue because what they want is easy
access to the particular labor supply or regulatory environment that works to
their advantage.

These firms have worked hard at persuading governments to enable
the making of an operational space that allows them to do what they “need” to
do. Governments have basically helped, even though they have understood,
because it is increasingly clear, that where
the jobs are lost or gained is quite secondary to these firms.

The United States data are disturbing:
it has basically lost 2.7 million jobs since the mid-1990s through trade
agreements –and 40,000 linked directly to the new US-South Korea free trade
agreement.[3]
The politicians know this, but only a minority is concerned, with the rest
happily accepting the self-serving analyses of the corporations themselves. [4]

The agreements for the T-TIP and the TPP
seem to contain particular clauses that are more extreme than prior major
agreements. In fact, workers organizations were not part of the
consultations, nor were consumer organizations. Most extreme is perhaps the new right for corporations to contest and sue
governments. This is a first; in its sharpest version it might lead, according
to some analysts, to a parallel legal system under the control of the
corporations. Thus specialized lawyers will handle the arbitration courts and
represent the corporations. There is no accountability to a higher court, or a
body that represents the people of a country or of a sub-national jurisdiction.

This is clearly an aggressive move by the
corporations to avoid interference in their modus operandi or to get
compensation for future profit losses due to decisions detrimental to their
interests.

The beacon of German renewables

A wind turbine in Germany. Wikipedia. Public domain.

An example in Europe that is brought up by critics of the proposed
T-TIP treaty is the fact that Germany’s program
to move to renewable energy could be subjected to these new corporate
rights, which might take the form of Germany having to pay for missed profits
due to the move to renewables.[5]

A potentially troublesome first step has
emerged: a major energy firm,
Vattenfall, is aiming at using precisely such an option to sue Germany for
future profit losses due to its energy shift. To do so the firm invoked an
energy agreement with such a provision; the agreement includes about 40 states
in Central Asia and Europe. This makes it an expensive option for a state to
pass national policies that go against the interests of global firms –said
differently, it becomes a significant incentive for governments not to
“interfere” with the profit-making options of such firms.

Elsewhere I have argued that one of the
major effects of globalization on the national state was on the executive
branch of government, which emerges more often as a partner than a contester of
the projects of powerful global firms (2008: ch5; 2014: ch 2). In fact, in early 2014,a panel of experts of a government-commissioned committee on research and
innovation in Germany has called for the abolition of
the Renewable Energy Sources Act (EEG). They argue that maintaining growth in
the renewables sector has led to price hikes, but
hasn't promoted climate protection. [6]
In fact, renewables
have gone from 4 to 16% of all energy.

The other ‘free-trade’ question:
jobs

To reassure citizens, the US and the EU argue that these
partnerships would stimulate trade and the economy, and that “an average
European household could gain 545 euros every year.”

This is the same argument that has been given by the US in its
long history of free-trade agreements. But that long history has generated a
lot of data, and the numbers are not pretty. Looking at the larger picture it
is clear that what free trade has often meant is simply lower prices via
cheaper imports. In this narrow sense, the household gains because they pay
less; the famous example of this is of course low-cost Chinese imports. But the
larger question is whether the economy in which this household exists also
gains so that it does not lose jobs or lead to lower wages, which would then in
turn, and with time, negatively affect households. And this negative boomerang
effect is of course what has happened.

We know from prior treaties that over time the winners are
global firms and the losers are national economies and particular segments of
their workers. So if I were Europe I would want to know what are the goods and
services that will become cheaper because we are importing them from lower cost
production sites.

It may be good for some countries and not for others. Europe is
a mixture in its economic space because in the East you have quite a few low
wage countries. Poland, for one, has thrived keeping its own currency, but
exporting to the EU; this arrangement has been a boon for them. I can imagine
those countries winning much more than Germany.

But for the global firms involved all of this is secondary: they
have that operational space and it has been constructed in their image and that
means to ensure their profits.

A more general good could in principle come out of such
agreements, but it would take a radically different type of treaty and
partners. It would be keen on treaties that are honest and where the logic
organizing the benefits of the treaty is not only the logic of corporations. It
should be a benefit to a whole economy –as I mentioned earlier just cheaper
products for households is not necessarily a positive as it can slow down and
downgrade a whole economy. I am all for a well run fair trade system, for
enabling small agricultural producers in poor countries to be able to sell to
rich countries, and enabling workers and modest firms in the countries
involved. All countries need all kinds of imports. But along with that I would
insist on a ‘localize
the economy’ logic – localizing whatever we can localize.

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The other major trade
agreement under discussion is the Trans-Pacific Partnership - see USTR (Office
of the U.S. Trade Representative). 2014b. “Trans-Pacific
Partnership (TPP).”

[2] I develop this in Territory, Authority, Rights, (Princeton
Univ Press 2008) ch 5 and 8; see also ch 4 for a longer history leading up to
the making of a global operational space that takes off in the late 1980s; and
in Expulsions, ch 2. (Expulsions: Brutality
and Complexity in the Global Economy
Harvard University Press 2014)

[5] This program
aims at exiting nuclear power generation, in about ten years. In the past
nuclear power supplied Germany with about 30% of its energy needs. The turn to
renewables is supported by generous subsidies, and it has worked: renewables
have become a real branch of industry in just a few years.

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